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Economic concerns, BlackBerry launch weighs down markets

An investor gestures in front of a stock price monitor at a private securities company in Shanghai, China, Wednesday, Sept. 5, 2012. Weaker-than-expected U.S. manufacturing figures, just days after China announced its own production slowdown, sent Asian stock markets down. (AP Photo)

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Malcolm Morrison, The Canadian Press
Published Thursday, January 31, 2013 10:33AM EST

TORONTO -- The Toronto stock market was lower Thursday, weighed down by U.S. economic concerns and uncertainty over how BlackBerry's new smartphones will be received by consumers.

The company formerly known as Research In Motion Ltd. (TSX:RIM) again weighed on the TSX, a day after the launch of its new BlackBerry 10 product lineup. Its stock was down a further $1.01 or 7.3 per cent to $12.85 on the TSX after tumbling almost 12 per cent Wednesday.

Availability is an issue as analysts note that U.S. customers won't be able to get the BlackBerry Z10 until March, a month later than it's available in Canada.

In recent weeks, RIM stock had soared 200 per cent from its 52-week low of $6.10 of last September in anticipation over the new product, seen as a make or break effort by the company. RIM's BlackBerry has lost market share to Apple's iPhone and the Galaxy brand of smartphones from Samsung.

The Canadian dollar was up 0.08 of a cent to 99.93 cents US after Statistics Canada reported gross domestic product grew by 0.3 per cent during November, better than the 0.2 per cent reading that had been expected. Year over year, GDP was ahead by 1.3 per cent.

U.S. markets were mainly higher a day after data showed the U.S. economy stalled late last year, shrinking at an annual rate of 0.1 per cent from October through December for the first time since the recession ended.

The negative reading raised doubts about the sustainability of a rally that has seen the Dow industrials surge 6.3 per cent since the start of the year, climbing close to 14,000 and within touching distance of its record level.

The Dow Jones industrials were ahead 21.07 points to 13,931.49, the Nasdaq gained 9.15 points to 3,151.45 while the S&P 500 index edged 0.12 of a point lower to 1,501.84.

Traders also considered data showing that U.S. consumer spending rose 0.2 per cent last month, which was slightly slower than the 0.4 per cent increase in November.

Income jumped 2.6 per cent in December from November as companies accelerated dividend payments to beat the January rise in income tax rates. It was the biggest gain since December 2004.

And a day before the release of the U.S. employment report for January, the Labour Department said weekly applications for unemployment benefits leapt 38,000 to a seasonally adjusted 368,000. The increase comes after applications plummeted in the previous two weeks to five-year lows.

In other corporate news, Facebook delivered fourth-quarter earnings of $64 million, or 3 cents per share, down 79 per cent from a year earlier when it was still a privately held company. Revenue rose 40 per cent to $1.59 billion, surpassing analysts' expectations of $1.51 billion. Ex-items, Facebook earned 17 cents per share, two cents ahead of estimates.

But the stock was down 5.57 per cent to US$29.50 amid concern over rising expenses.

Potash Corp. (TSX:POT) was also in focus after it reported that its fourth-quarter profit fell to US$421 million, or 48 cents per share, missing analyst estimates by nine cents a share. The result includes a US$41-million charge related to the settlement of antitrust claims in the United States as well as substantially lower revenue as customers delayed their buying decisions amid economic uncertainty. Revenue was $1.64 billion, down from $1.86 billion a year earlier, and also below analyst estimates and its stock was down $1.06 to $42.13.

The gold sector was also pressured on the TSX, down 1.15 per cent as bullion stepped back $16.60 to US$1,665 an ounce. Barrick Gold Corp. (TSX:ABX) faded 50 cents to C$31.97.

The energy sector was down 0.5 per cent with March crude down 77 cents to US$97.17 a barrel. Canadian Natural Resources (TSX:CNQ) fell 58 cents to C$30.59.

The April copper contract was down a cent at US$3.74 after running ahead six cents on Wednesday. The base metals component was down 0.7 per cent and First Quantum Minerals (TSX:FM) gave back 31 cents to C$20.22.

Financials also weakened with Manulife Financial (TSX:MFC) down 12 cents to $14.51.

All TSX sectors were in the red, save for a small gain in telecoms.

In other earnings news, Dow Chemical saw significant deterioration in key markets during the fourth quarter, particularly in China, and posted a fourth-quarter loss of $716 million, or 61 cents per share. Excluding restructuring and other charges, the Midland, Mich., company earned 33 cents per share, a penny shy of estimates and its shares declined 5.55 per cent to US$32.69.

United Parcel Service Inc. is reporting a fourth-quarter loss of $1.75 billion because of a $3 billion accounting charge for pension liabilities. Without the pension item, UPS said that it would have earned $2.05 billion, or $1.32 per share. Analysts had expected UPS to post adjusted earnings of $1.38 per share. UPS shares fell $1.30 to US$79.93.

European bourses rose with London's FTSE 100 index down 0.23 per cent, and Frankfurt's DAX and Paris CAC 40 declined 0.2 per cent.